There has been a bit of discussion around blow out tops and the Nasdaq is doing a good impression of one (as is the Semiconductor Index). While we can look at the gap-run over the past few days, we can also look at the relationship of the index to its 200-day MA. In the case of the Nasdaq, it sits 20.4% above its 200-day MA, which only puts it in the 10% zone of extreme historic price action; at 21.4% it will be in the 5% zone and 28.9% sticks it into the 1% zone. The 1% zone is a screaming sell, but the 5% zone, last seen in January 2021, is another. For the record, the January 2021 extension wasn't the absolute high - the index added another 10% before the year was out - but then it gave up 37% from that high. None of this is rocket science, but we need to be aware this run is coming to an end sooner rather than later.

Markets remain bullish, but there are still warning signs things are still a little hot. In the case of the Russell 2000 ($IWM), the index closed with a 'black' candlestick that failed to challenge the $252.77 high (that itself was a spike high). Today's volume registered as accumulation, although overall volume was lighter. On-Balance-Volume and +DI/-DI generated new 'buy' signals, with the MACD about to return to a new 'buy' signal.

Trading volume is telling a truer story than price; gains on lower volume, losses on higher volume. The Russell 2000 ($IWM) posted a loss on higher volume distribution. Today's loss came with a new 'sell' trigger in On-Balance-Volume and a bearish cross in +DI/-DI. The large red candlestick from last week is calling, and an undercut of the 50-day MA is now looking like the next move for the index.

Bulls are doing a little better than I expected with the best of the action coming from Bitcoin. The false breakout at the beginning of October delivered the reversal back to former trading range support, as is often the case in such scenarios, before the spiked low and rally off converged 200-day MA and trading range support. Technicals are strongly net bearish, so this bounce will need to do more if it's to fix the weak technical picture.

The Russell 2000 ($IWM) had done well to reverse its first big red candlestick in months on a solid day of "value" buying, but struggled to build on it. Now, with bad news sweeping the regional banking sector - leading to another sizable red (selling) candlestick on confirmed distribution - it's hard to see buyers coming in for a second bite. In percentage terms, markets are trading above summer levels, so there isn't too much downside to take what you can now (across all asset classes), and wait it out (until the next dip below 200-day MAs).

A real mixed bag for markets. All indices were hit hard by Friday's Trump Tariff Special, but Small Caps ($IWM) are the only one trying to make a come back. Volume rose in confirmed accumulation, but it was below the volume of Friday. Technicals are mixed, but there was a surge in the relative performance of the index over its peers.

It has been a while since we have seen the kind of one day selling markets experienced on Friday, again driven by Trump's idiosyncrancies. Where he might gain a win in Gaza, he undos with rumors of tariffs, with a government shutdown running in the background that offers little in the way of an exit given his penchant for layoffs of Federal workers. One day of selling doesn't kill a rally, but it has put a big dent in the confidence of the rally. The Russell 2000 ($IWM) sliced through its 20-day MA and is on course to test its 50-day MA and rising trendline support. A break of this line would be more terminal for the current bullish run, and open up for a test of the 200-day MA. I would expect some form of bounce on this test, the question will be, how much. Technically, we have a 'sell' in the ADX, along with the earlier MACD 'sell'.